Manufacturers today face mounting pressure to boost profitability while tackling rising operational costs and often miss opportunities to maximise savings.
Optimising logistics and warehousing are two critical and often underutilised areas of focus for improving margins.
Streamlined logistics can reduce overheads, shorten lead times and improve customer satisfaction. Start by gaining visibility across your entire supply chain. This allows you to pinpoint inefficiencies, manage inventory more accurately, and respond to disruptions proactively.
Digital supply chain tools offer real-time tracking of materials and shipments, providing insights into supplier performance, delivery timelines and stock levels. These tools support just-in-time (JIT) inventory systems, which reduce storage costs and free up working capital. However, combining JIT with strategic buffer stocks for essential components helps balance efficiency with resilience.
Regular audits can highlight issues in:
- Order processing times
- Supplier lead times
- Freight and transport costs
- Inventory turnover rates
Addressing these factors can lead to 10 to 30% cost reductions in inventory management.
Smart warehousing: beyond storage
Warehousing has evolved from a passive storage function to a strategic asset. Modern warehouse management systems (WMS) allow automation of stock handling, improved picking accuracy and reduced labour costs.
IoT sensors can track inventory movement and condition in real-time, improving traceability and reducing spoilage. Combined with AI analytics, these systems help forecast demand, optimise stock levels and flag equipment issues before they cause costly downtime.
Key warehousing enhancements include:
- Automated guided vehicles (AGVs)
- Barcode and RFID technology for accurate tracking
- Real-time dashboards for logistics visibility
These tools reduce waste, speed up operations and support competitive advantage.
To maximise logistics efficiency, lean manufacturing and 5S principles remain highly effective. These methods promote organisation and eliminate waste, especially in high-throughput environments.
Standardised work instructions and value stream mapping streamline operations by identifying and eliminating non-value-adding activities. If packaging delays are affecting dispatch, for example, a process review could repurpose labour or restructure workflows.
Quick changeover techniques (e.g. SMED) reduce downtime between product runs, helping you meet customer deadlines more reliably.
Enhancing supply chain resilience
Resilience is now a key part of logistics strategy. Dual sourcing, local supplier relationships, and flexibility in transport routes help protect your operations from disruptions.
Working closely with suppliers through collaborative planning enables better alignment with production schedules, reducing the risk of stockouts and late deliveries.
Diversifying logistics channels – using road, rail, and sea – also allows faster adaptation to market changes and avoids reliance on a single mode of transport.
Today’s manufacturing logistics are powered by data.
Dashboards and KPIs help track warehousing and shipping performance. Real-time analytics quickly identify bottlenecks or underperformance, enabling faster decision-making.
Predictive analytics, powered by machine learning, take this further. They forecast demand, suggest optimal stock levels, and predict equipment failures. Used effectively, they lead to:
Manufacturers using predictive analytics have reported:
- 15–20% reduction in quality-related costs
- 10–25% improvement in delivery performance
- Increased customer retention from more reliable fulfilment
Sustainable warehousing and logistics
Sustainability isn’t just about doing the right thing – it’s a sound financial strategy. From energy-efficient lighting and heating in warehouses to solar-powered logistics hubs, many green investments pay for themselves within a few years.
Energy storage solutions allow you to use cheaper off-peak electricity during production, cutting bills by up to 20%. Eco-friendly packaging can also reduce freight weight and appeal to environmentally conscious customers.
Closed-loop systems – where packaging or materials are recovered and reused – further reduce waste and disposal costs.
Bring your accountant into the conversation early
While logistics technology can transform your operation, it’s crucial to consider how these systems integrate with your financial processes.
We often see businesses adopt new stock management or supply chain tools without syncing them with their accounting systems — missing out on valuable data insights or tax-saving opportunities.
For instance:
- If your new tech tracks stock, make sure it integrates with your accounting platform for accurate reporting and stock valuation.
- Many systems used to improve internal processes may qualify for R&D tax relief.
- Green upgrades like solar panels or energy-saving equipment might qualify for capital allowances or sustainability-linked finance.
At Cottons, our dedicated team supports manufacturers and logistics firms going digital. As part of our digital advisory service, we help ensure any new tech investment works in tandem with your finance function.
We’ll assess:
- Where integrations are needed between operations and finance
- Eligibility for relevant tax savings or government support
- How to structure your systems for smarter forecasting and reporting
Bringing your accountant into the conversation early can save time, reduce manual duplication, and improve return on investment.
Unlocking more value
Ultimately, profitable logistics is about more than moving goods — it’s about designing a connected, efficient, and agile system that links every part of your business. Whether you’re investing in automation, upgrading your supplier network, or implementing green solutions, each step forward should also support your financial health.
At Cottons, we work with manufacturers across the UK to uncover inefficiencies, improve processes, and make sure your digital transformation delivers measurable gains.
Thinking about optimising your logistics and warehousing?
Let’s talk. We’ll help you make smart investments — and ensure they align with your financial strategy for long-term growth.
Contact Cottons Group at their website here.
Written by:
Jay Mistry
Tax Incentives Manager
Cottons Group
